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Just recently, the finance minister, Rachel Reeves, presented a Labour Party budget. The public have been asking for Labour’s mission and principles to be more clearly articulated. Through the choices made – a shift to a more equitable tax system, focusing on wealth to fund tackling child poverty, good public services and the living expenses – we have unequivocally set out what we stand for.

This is why Labour MPs cheered in the Commons, and it’s why we are up for the fights to come. And it’s why the protests from the right began right away.

The Central Political Divide in British Government

The central dividing line in British politics is once again on the economy. On the one side Labour, who want to reform it so it benefits ordinary working people, and on the opposite side, our political opponents, who support the status quo and the unsuccessful ideology of the past. We must now confront, and prevail in, the argument.

The Tories had 14 years to fix things and in reality, by every standard, they got much worse. Their doctrinaire austerity and supply-side economics – tax breaks for the wealthy, reducing investment (leaving us with poor productivity and wages), and neglecting to support young people after the pandemic – proved ineffective.

Legacy of Decline Under the Previous Administration

Quality of life dropped by the largest margin since records began, child poverty hit record levels, NHS waiting lists in England were the highest on record, wages were stagnant, a housing crisis became entrenched, young people scarred by Covid were left on the scrapheap. The record of failure goes on.

A single budget alone can’t fix everything, so Labour has a comprehensive plan for renewal and for restructuring the country. And we have to go out and keep making the case for why our approach will yield benefits.

Welfare Spending and Youth Deprivation

Under the Tories, welfare spending significantly increased. As did child poverty, because they didn’t address the underlying issues: low pay, high housing costs, significant inequalities in education, health and regions. The state is forced to paying more to deal with the symptoms instead of the solution.

That’s why we are building more affordable homes than for a generation, raising wages and new rights for workers, greatly increasing investment in infrastructure and new industries, getting waiting lists down and lowering the costs of childcare and energy as we drive for clean power.

Removing the Two-Child Limit

This is also the reason we are absolutely right to use this budget to lift the two-child benefit cap.

For almost a decade, since it was introduced, poorer families with children have endured from a unjust social experiment that was branded as fair for working people when it was the opposite. Most of the families impacted by it have a parent in work.

It’s done nothing but push 300,000 more children into poverty – which, in the end, costs us more, as well as being callous and unethical.

Real Impact in Communities

From experience from my own district – where over 5,000 children will be raised out of poverty as a result of ending the cap – the actual impact it’s had. Children wearing low-cost wellies as school shoes, children going to bed without food and cold, living in overcrowded, mouldy homes, parents during the holidays relying on food banks for a modest meal or small gift for their kids.

I also see the impact on schools, teachers, social workers, doctors and charities who are already overburdened but have to redirect time and resources to supporting children who are living with the consequences of deep poverty.

Lasting Consequences of Child Poverty

Just one in four pupils from the most disadvantaged families achieve five good GCSEs, compared with nearly three in four among affluent families. This sets them up for the disadvantages they face during their lives: unrealized potential, financial struggles and poor health. Children who were raised in poverty are more likely to be unemployed or poor as adults.

Confronting child poverty isn’t just a moral imperative, it is a future-oriented strategy. Poverty costs the economy significantly more than the £3bn cost of removing the two-child cap, or expanding free school meals.

That’s why we acted promptly in the budget, despite the challenging economic context. Every day with this cap in place sees over a hundred extra children pushed into poverty. The effects of lifting it won’t happen overnight either, so taking early action in the parliament was crucial.

The cap was a symbol to 14 years of unsuccessful conservative ideology. Now it is gone.

Equitable Funding for Measures

We, as Labour, can also be clear that these measures are being paid for in a just way – from a new gaming tax, eliminating tax loopholes and a new “mansion tax”.

Final Thoughts

Equity and purpose – that’s how we will win the battle of ideas. This budget is a definitive statement that we won the election as Labour, and will lead as Labour. As I consistently said during my campaign to become deputy leader, we must reclaim the political megaphone and set the agenda more forcefully about what’s really wrong with the country and how we are fixing it. We’ve definitely done that this week.

So let’s maintain it and prevail in this fight about how we will rebuild Britain and address the entrenched inequalities holding us back.